Amazon pays 0 tax because they deduct the difference between stock grant and vest value from tax bill because this is a “company loss”. Meanwhile employees get no refreshers due to stock appreciation? so Amazon wins both ways?? “Last and most significant to understanding the change in 2018 is the fact that companies can deduct the cost of stock-based compensation from their taxable earnings even though it doesn’t actually cost companies any money to hand out shares of their own stock to employees. What’s more, the way this cost is estimated is that the more your share price rises, the bigger the deduction for handing out shares.“ https://www.vox.com/2019/2/20/18231742/amazon-federal-taxes-zero-corporate-income
Finally someone else talking about this. I’ve been saying this for a while. Dirty cheap tricks played by a dirty cheap company. This is one of the many reasons that despite of maybe more than 100 LI invitations for Amazon interviews, I could care less about working for them. Only once several years ago I went for an interview there not because I wanted the role (Principle PM for Alexa core) but because I wanted to see their interview process and not surprisingly, it turned out ridiculously easy. Zero prep, a lot of upfront talk about how many months (9) they’d been interviewing for this role without being able to find the right candidate, a lot of selling on their part (put me in business class, in the penthouse of a super fancy hotel and even gave me a $1000 pre-paid card for “my food and around town commute expenses” during the interview process, which was 1 day), and a lot of lip service about its importance to the entire Alexa org. Ended up getting the offer within a day, declined it the same day. Would never go to a company that basically took advantage of entire states making their administration look like fools divulging governmental information they shouldn’t have and in the process dragged a bunch of residents along for the ride and cost them and their communities a pretty penny.
Yo, $1000 pre-paid card, business class, penthouse. Amazon Bois where is frugality? Where you interviewing for L8+ position?
I was quite shocked when I saw that treatment too because I had heard from friends who had interviewed there before me that they were super cheap with them. And in terms of levels, it was for a Principal, which is an L7.
it doesn’t actually cost companies any money to hand out shares of their own stock to employees This does not seem true. Companies don’t print stock just like that, it would decrease their value. Stocks given to employees are purchased from the market or issues from the reserved pools that companies hold.
Facts. I suggest OP sticks to leetcode 🤣
lol @Xxrb20 I suck at LC so no thanks. Fyi, I was an Amazon employee and Brian Olsavsky talked about what I said in detail to all employees after Amazon was attacked for paying 0 taxes after making 10B in profit. I didn’t make this stuff up. @blipin - who said shares don’t cost the company any money? The article is about difference between granted stock value and vest value. Amazon’s point is that the delta is a loss that they didn’t account for, but the reality is that the delta is a part of TPC for their employees. They plan the whole thing around it.
gajab gan*u company hai
🤔 why the finger pointing at Amazon, I wonder. Are there companies that are not taking advantage of this legal provision and instead paying more tax than what they owe? Or is this just teeth gnashing because other companies' stocks didn't perform as well as AMZN?
Haters are envious of AMZN. All major corporations have leveraged tax tricks to minimise their outflow. It is a standard business practice.
And why is this even being called a "trick"?
Not quite sure this is new or News Worthy. Most companies will try and maximize costs against revenue to minimize there tax bill. Individuals usually try and do the same through the 6 or so deductible options to them. Its been a while since I checked the hard numbers. Businesses have something like 200 or so for different business types. There has to be a profit large enough to cover ALL your costs to be actually taxable. Depending on the year, my side Tech Consulting gig may provide me with more than enough deductible costs to lower my tax bracket by at least one if not two. That combined with Donations to non-profit organizations and housing costs are the best ways to help yourself out personally with the tax structure in the US. I say plus one for the capitalist way of generating revenue streams.
It’s newsworthy because while it may be technically legal, a company of the size/value/power of amazon, who are eating up entire counties as their office playgrounds, whole market sectors as near monopolies and taking advantage of national services bringing them to the brink of collapse (USPS), *should* choose to do better to repay the good they have sucked out of their surroundings because a business is not (or should not be) just a mindless, soulless, money printing machine only. In other words, they benefit from what the tax payers pay for but they themselves refuse to pay tax because they are exploring all tax loopholes. It’s immoral regardless of its legality.
If they are handing out the stock (not real money untill sold) and that sale is taxed then the contribution to the tax system will actually be at a higher rate either by capital gains or normal individual tax bracket. Seems rather simple. You can't tax something that isn't real money untill you convert it.
It's called being smart. Beat the system legally if you can. Hats off to Amazon for this loophole. Respekt! ✌️
To everyone saying don’t all companies do this? Maybe but only Amazon has “Total Projected Compensation (TPC)” model that takes stock appreciation value into salary planning then grants no refreshers to employees. If employees are paying for the difference from their own salaries, Amazon should not take tax deductions for it because this money was not a loss. They can either give fair refreshers or claim no deductions. Why are Amazon employees upset with me? I’m saying you should get paid more.
Kinda makes sense but technically the two are not related. The tax deduction is not incumbent upon "fair refreshers". Also Amazon is happy to tell people to vwyf if they don't like the compensation and yet people are flocking to it anyway :(
Yeah. This is like screwing over the with one hand and the government with one hand and the employees with the other hand. Paying less in the future because stocks about to vest have appreciated in value is a dick move.
Illegal? No. Ethical? Don’t know.
The entire American taxation system is by the rich and for the rich. What else can explain the low long term capital gains tax and a salary cap on social security tax. This is just the icing on the cake. The corporate loopholes go much further.
If you hold on to your own stock for the same amount of time as others to qualify that income as capital gains then you will see the same benefit of a 15ish percent tax bracket as well. Trouble is that most people don't hold on to stock long enough to drop it out of there normal tax bracket and if you are a FAANMGer earning 150k plus a year your still looking at a 30% + tax payment for that sale.
anyone know any personal “tax tricks” like this? Can I start a Delaware c-class and expense my living expenses out as a “Lifestyle consultant” if I write a 50 word blog about lifestyle online?
Can you afford lawyers when the IRS takes you to court? That’s the only question.
PLLC'S are your friend.